GUIDE TO CRIMINAL BACKGROUND CHECKS IN EMPLOYMENT

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1 GUIDE TO CRIMINAL BACKGROUND CHECKS IN EMPLOYMENT Philadelphia LawWorks, a project of Philadelphia VIP, contributes to Philadelphia s economic development by ensuring that homeowners, nonprofits and small business owners legal needs are met and by educating clients and the community to prevent legal problems. Philadelphia LawWorks prepared this guide to help distribute basic legal information to the community at large. While the information contained in this publication concerns legal issues, it is intended solely to provide general information. This guide is not intended to constitute legal advice or substitute for obtaining the advice of an attorney. It is understood that Philadelphia LawWorks providing of this guide and your reviewing of this information does not establish an attorney-client relationship. No action should be taken in reliance on the information provided in this guide, except after prior consultation with a lawyer. The following describes federal and Pennsylvania law applicable to criminal background checks in employment situations. WHAT IS A CRIMINAL BACKGROUND CHECK? In the employment context, a criminal background check consists of information about an individual s prior criminal history that an employer uses to evaluate job applicants and current employees. WHY DO EMPLOYERS NEED CRIMINAL BACKGROUND CHECKS? Many job applicants submit false information to potential employers on employment applications and resumes. To protect against this and to obtain accurate information about potential employees, employers use background checks. By obtaining background information about applicants, an employer can protect itself from sexual harassment lawsuits and reduce employee theft and other financial loss. Failure to obtain criminal background information about an employee who later engages in inappropriate conduct may subject an employer to liability, as someone who is harmed by an employee s conduct may assert a claim against the employer for negligently hiring, supervising or retaining the employee. ARE CRIMINAL BACKGROUND CHECKS REQUIRED? In Pennsylvania, criminal background checks are only required for certain kinds of jobs, such as those related to law enforcement or working with children, the elderly, or disabled individuals. Applicants Philadelphia LawWorks would like to thank Andrea de Vries, a summer associate at Pepper Hamilton LLP and Stephan Sundheim, a partner with Pepper Hamilton LLP, for creating this legal guide.

2 convicted of certain offenses may not be employed in these positions. DOES AN OUTSIDE COMPANY HAVE TO PERFORM THE INVESTIGATION? No. Employers may perform their own criminal background checks. To do so, they should obtain relevant information from each jurisdiction where an applicant has lived or worked. Information can be obtained either online or at the appropriate courthouse, unless the case has been sealed by the court. Pennsylvania provides access to criminal history information through the Pennsylvania Access to Criminal History (PATCH) System (http://www.psp.state.pa.us/patch/site/defaul t.asp), which allows individuals to run a criminal background check for $ IF AN EMPLOYER HIRES AN OUTSIDE COMPANY, WHAT WILL THE BACKGROUND CHECK INVOLVE? Employers can hire an investigative firm to conduct a background check. These third parties will conduct a background check based on the kinds of information that an employer needs, such as an individual s credit and criminal histories. In appropriate circumstances, an employer can obtain several categories of information about a job applicant, including: Bankruptcy Information Reveals any record of a bankruptcy by an individual, including the case or file number, date filed, type of bankruptcy, discharge date and petitioners. County Civil Search Reveals lawsuits filed by or against individuals, including civil rights claims, judgments, nonpayment for goods and other comparable cases. County Criminal Convictions Reveals an individual s felonies and misdemeanors within a particular county. They typically disclose the date of the crime, county, defendant name, case number, date of birth, sex, height, weight, race, charges and sentence. Credit History Report Reveals debt load, account status and previous addresses. Current Address Search Verifies the current address of the applicant. Educational Verification Verifies the applicant s dates of attendance, graduation date and degree earned. Under federal law, transcripts, recommendations, financial information and disciplinary records are confidential and their release must be authorized by an adult student or parent. Employment Verification Verifies past employers names, -2-

3 applicant s titles, dates of employment, and salary history. Military Service Verification Verifies the name, rank, branch of service, duty assignments, awards and current military status of an applicant. *Dishonorable discharge may not be an absolute bar to employment* Motor Vehicle Records Search Reveals the driving record of an applicant. Driving under the influence charges, moving violations, tickets, accidents, reckless driving and suspended licenses will be revealed. Social Security Number Verification Verifies the name, current and past addresses, and the month/year of birth. A social security search may detect false social security numbers and the name of any other person that has used or been associated with the number. Statewide and Federal Criminal Records Searches Provides an employer with the criminal history record of an individual. Results typically show the date of crime, county, case number, defendant name, date of birth, race, sex, height, weight, charges and sentence. Professional License Verification Verifies the professional license, date of issue, renewal, expiration date, current status and any disciplinary action of an applicant. Sex Offender Information Reveals whether the applicant is a known sex offender. -3-

4 Terrorist Watchlist Search Reveals information about suspected terrorist affiliations of an applicant. Workers Compensation Reveals injury description, injury date, filing date, weekly compensation rate, and the compensation time frame. *There are special procedures to obtain workers compensation records under the Americans with Disabilities Act. The records may only be obtained after a conditional offer of employment has been extended. An applicant may not be denied employment because of a prior workers compensation claim or award. USE OF CONSUMER REPORTING AGENCIES SUCH AS INVESTIGATIVE FIRMS If an employer uses a consumer reporting agency (CRA), such as an investigative firm, to investigate an individual s credit worthiness, general reputation or character in evaluating someone for employment, promotion, reassignment or retention, the employer must comply with the federal Fair Credit Reporting Act (FCRA), which regulates the use of information gathered. Under FCRA, a consumer reporting agency is any person or group of people which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the process of assembling or evaluating consumer credit information or other information... for the purpose of furnishing consumer reports to third parties. If an employer conducts its own research without using a CRA, there are fewer FCRA requirements. Companies that supply information from public databases (e.g., Lexis.com, Westlaw.com) and do not create actual credit reports, but maintain public records, are still regulated by FCRA as consumer reporting agencies. To comply with FCRA, employers who use third parties to obtain background checks on applicants and employees must: Provide written notice to the applicant or employee that the employer intends to obtain a consumer report from a CRA for employment purposes. Obtain written authorization from the applicant or employee before receiving a report. Confirm to the CRA that the above steps have been followed and that the employer will comply with FCRA. When an adverse action is taken, provide the individual with a copy of the consumer report, the Summary of Your Rights Under the Fair Credit Reporting Act, provided by the Federal Trade Commission, and the contact information for the CRA that supplied the report. This allows the individual to dispute or clarify any inaccurate or incomplete information in the report. An employer is liable under FCRA for failing to comply with the above provisions. FCRA does not distinguish between a large corporation and a small business. Instead, it applies to every business that seeks information, such as -4-

5 a consumer report, about an applicant or an employee. USE OF CRIMINAL CONVICTIONS AND ARREST RECORDS Pennsylvania Law Pennsylvania law is more restrictive than federal law regarding the use of criminal records by employers. Under state law, an employer may only consider a potential employee s felony and misdemeanor convictions to the extent to which they relate to the applicant s suitability for employment in the position to which he has applied. Thus, an employer may not use convictions as an absolute bar to employment. The conviction must be related to suitability for the position sought. Pennsylvania law also does not permit an employer to use an arrest record to disqualify an applicant. If an employer decides not to hire an applicant based on his criminal history record information, the employer must provide the applicant with written notice. Federal Law Unlike Pennsylvania law, there is no federal statute directly regulating the use of criminal history records. However, under Title VII of the Civil Rights Act of 1964, it is possible for an individual to question an employer s reliance on an individual s criminal convictions and arrests if they are used to disqualify minorities. Among other things, Title VII prohibits employment discrimination based on an individual s race. Title VII requires employers to make hiring and retention decisions on the basis of jobrelated factors and not those related to race or national origin. Title VII prohibits any policy that automatically disqualifies any job applicant with a criminal conviction. The Equal Employment Opportunity Commission has concluded that African Americans and Hispanics are convicted at a rate drastically higher than their percentage in the population. Automatically barring employment of individuals with criminal convictions would create a barrier to employment that would leave a large group of citizens permanently unemployed. Similarly, employers may not use arrest records as an absolute bar for employment. Because a court may conclude that an employer s reliance on conviction or arrest records disproportionately screens out minority applicants and is therefore discriminatory, an employer should only disqualify an individual on the basis of a criminal conviction or arrest if it can show that the criminal record is job related and relatively recent and that exclusion of the person is consistent with business necessity. -5-

6 Business necessity generally is defined as a practice or policy that is essential to the safe and efficient operation of the business. The employer should look at the nature of the job and the scope of an employee s duties before making a determination. Other factors such as when the crime was committed, the seriousness of the crime and the nature of the offense should also be taken into account. Once an employer conducts background checks for a position, it should screen all potential candidates who are being considered for that position and evaluate them using the same criteria. An employer that engages in selective background checks may be liable for discriminatory conduct. -6-

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